09-05-2010 10:13 AM
In Saturday's US Mail, my wife and I each got envelopes from Citibank informing us that her Diamond Preferred Mastercard and my Platinum Plus Mastercard will soon become World Mastercard accounts. My one concern about this is, I believe World Mastercard is a "no preset limit" account so it may muck up the utilization ratio depending how it's reported and calculated. My wife has two credit cards in her purse, her Citi card in her name and a Chase on which I'm the primary cardholder and she is an authorized user. I've also got Amex and Discover cards on which I'm the only user. At present her Citi account has a limit of $15K and mine a limit over $20K; my Discover has a limit over $10K and our Chase has a limit over $20K; my Amex is a traditional Gold card with no preset limit. Neither of us carries balances, the only interest we pay is our mortgage, so our various balances bounce around as we make purchases and payments, sometimes a balance may briefly hit around $5K following a major purchase.
Does anybody have any insights on how this change to no-limit cards will affect how FICO computes our utilization ratios? Both of us have good FICO scores, and it would be annoying to lose a few points merely because Citi decides to make a product change.
We don't yet know whether the interest rates will be any different after our respective product changes take effect, and don't particularly care about CC interest rates anyway since we don't pay them.
09-05-2010 12:22 PM - edited 09-05-2010 12:25 PM
fused has good info on this:
"The CITI World Master Card might or might not report a CL or a high balance. When no CL is reporting, FICO then looks to see if a "highest balance" is reporting. If a CC doesn't have a CL and a highest balance reporting, the card will not factor in FICO revolving utilization calculations."
So CL reported: calculated as usual.
No CL reported, but highest balance reported: util will be figured on the highest balance figure. (So you're reported util will be higher, unless you once maxed out the card.)
Neither CL nor highest balance reported: ignored for util. (So your overall util might be hurt, as you've lost this card's CL in the denominator of your util calculation.)
The decision to report the CL seems to vary by lenders. I have a USAA World MC, and it reports the full CL, and it factors in my revolving util. My BofA card just switched to a World, but it hasn't updated yet, so I don't know what it will report and therefore how it will be used.
Did Citi give you an option on this, or are you stuck with it?
09-05-2010 01:25 PM
I also got a similar letter for my Diamond Preferred Rewards, I think I will call Citi to downgrade from WORLD MasterCard. I don't want my credit history to be affected by an non-requested product change. Maybe someone else can inform us about this issue.